NEW YORK, April 11 (Reuters) - Ohio regulators announced new rules for oil and gas drilling on Friday after evidence emerged linking the hydraulic fracturing extraction method, known as fracking, to recent earthquakes.

In the strongest wording yet from the state, the Ohio Department of Natural Resources (ODNR) said that injecting sand, water and chemicals deep underground to help release oil and gas could be inducing tremors.

Last month, drilling was suspended at the site of two earthquakes in Poland Township in the northeast of the state, 70 miles southeast of Cleveland, the first of which was magnitude 3.0, enough to be felt for miles around.

"Regarding the seismic events in Poland Township, ODNR geologists believe the sand and water injected into the well during the hydraulic fracturing process may have increased pressure on an unknown microfault in the area," the deparment said in a statement.

The rules announced Friday require companies to install seismic monitors if fracking occurs within three miles of a known fault or an area which has recently experienced quakes, the ODNR said.

Friday's statement could have wide implications not just for a state where a drilling boom is underway, but in other regions where concerns have emerged about the impact of fracking on fault lines.

The DNR had not previously linked earthquakes to fracking, which involves fracturing rock by creating a series of small blasts thousands of feet below the surface.

The disposal of drilling wastewater in rock bed deep underground has been linked by geologists to earthquakes, like the 4.0 magnitude one experienced on New Year's Eve 2011 in Youngstown, Ohio, but opinion is divided about whether fracking itself can cause quakes.

While there are concerns about the environmental impact of injecting chemical-laced water into the ground, including on fresh water supplies, they are spreading to include the effect on fault lines than run beneath the surface, often undetected.

Worries surrounding seismic activity emerged in Ohio in 2011 when a spate of small quakes followed the beginning of intensive drilling in the Utica shale. More than 800 wells have been drilled in the Ohio portions of the Utica and the Marcellus shales, two major gas deposits that have helped transform the U.S. energy market. The United States is set to export gas for the first time to countries across the globe.

"ODNR's directives are a sensible response to a serious issue that regulators across the country are closely examining," said Gerry Baker, Associate Executive Director of the Interstate Oil and Gas Compact Commission. (Reporting By Edward McAllister; Editing by Alden Bentley)